Amway’s DigitalTransformation from online ordering to digital business

e-point.com

Figure 1:e-point receiveda Project ExcellenceAward for theimplementationof Amway's platformin 10 East Europeancountries.

Key challengesbuilding digital capabilities in the organization

digitalization of the B2B models of cooperation with Amway Business Owners

bridging the gap between online and offline experience with the business

Key benefitsincrease in online orders from 30% to 80% of the total value of orders after theimplementation of the digital platform in Europe

sixfold decrease in operating costs comparing to the previous solutions after theintroduction of the new platform and key sales and support processes optimization

increase in the success rate of online registrations among Amway Business Owners from 70% to nearly 90%, as an effect of the customer experience (CX) improvements in the Pain Points Removal Project

Amway’s digital transformation began with our implementation of the platformin the first 10 East European countries. In 2007, the Project Management Poland Association honoured the work we did for Amway with a Project Excellence Award for the most effectively managed project.

Amway's Digital Transformation

2

"e-point has collected and properly

managed knowledge of the Amway

business model, the context

of functional assumptions and local

markets specifics. Thanks to e-point’s

deep domain knowledge, we were sure

that Amway would be able to achieve

optimal IT solutions. Moreover, we have

always felt that our relationship with

e-point was a true partnership. Our needs,

mostly of a very complex nature, were

heard, deeply considered and satisfied."

Michael Gamaggio,Regional Head of

Digital Services EIA Europe, India, Africa,

Russia Amway GmbH

Amway is the world leader in direct selling and operates in 80 countries. Amway lets anyone start their own company and sell high quality products and offer others the opportunity to sell too. More than 3 million Independent Business Owners (IBOs) currently work with Amway worldwide.

Amway offered its IBOs in Eastern Europe the opportunity to order and sell products online in 2001– first in Hungary, then Croatia, the Czech Republic, Poland, Romania, Slovakia, Slovenia, and Turkey. The system was a huge success with 126,000 users by the beginning of 2006.

The company decided to build a completely new online system that could handle significantly more Users, offer new functionalities, and allow for flexible functionality changes to keep pace with the ever changing business environment. An important aim of the new project was to deliver a new, clear and attractive tool to facilitate placing orders, aid daily business operations and attract people to Amway.

Ukraine, Russia, Turkey, Poland, Hungary, Croatia, Czech Republic, Romania, Slovakia, Slovenia

In order to better understand the future solution, we prepared a systemprototype. This was then used to conduct sessions with selected Amway IBOsin Warsaw, Prague, and Budapest . The prototype enabled us to collect valuable feedback and the client to prepare for the upcoming changes.

The system was first implemented in Ukraine, which did not have an e-commerce system at the time, so this was a pioneering enterprise for that country.

As a result of the experience gained from our first implementation, we modified our original project assumptions and decided to make reference visits to eachof the countries involved. During those trips, we presented parts of the system specifications, especially those concerning country specific functions, e.g., ordering and payment options, and customer invoicing. Our system engineers workedon the final system specifications onsite.

We managed implementation of the system in two countries every two months and the users responded enthusiastically in every case. Once the system had been implemented, the value of online orders (as a percentage of the total) increased from 30% to 60% and is now approaching 80%. The number of registered users and orders also rose dramatically.

Austria, Belgium, Denmark, Finland, France, Greece, Spain, the Netherlands, Ireland, Germany, Norway, Portugal, Switzerland, Sweden, the United Kingdom and Italy

The success of the Eastern European implementation, as measured by the volume of orders, the percentage of online orders in the total number of orders, and the significant reduction of operating costs convinced the Management Boardof Amway Europe to continue with 16 Western European countries.

Since 2012 we have observed a growing number of visits to Amway Online frommobile devices – smartphones and tablets. Users, especially the Amway Business Owners (ABOs), started to ask about a mobile version of the system that they could access on their smartphones, while at their clients' location. Therefore, we faced the challenge of devising a mobile strategy for Amway Online.

Frequently, mobile projects are understood as mobile applications copying existing functionalities of desktop Internet systems. This understanding could not be more wrong. On the contrary, mobile solutions should take maximum advantage of the capabilities of mobile devices and fit into the overall customer service strategy.Which is why we use the term mobile strategy.

2 apps x 2 versionsThe mobile solution is comprised of two separate applications, one for the iOSand the other for the Android operating system. Each application has two versions: one version for smartphones and one version for tablets. The informationarchitecture changes accordingly based on the device being used, which allowed us and our client to avoid creating separate applications for tablets.

Collecting ordersThe Amway Business Owner can collect an order for his or her client in the formof a shopping list. This list is then synchronized with Amway Online, where the ABO can eventually confirm the order. Order confirmation is made in Amway Online Light, therefore, also via a smartphone or tablet. As you can see, order collection can be done offline, while placing the order requires an Internet connection and, in fact, happens in the Amway Online system. Thanks to this approach we avoided rewriting the complex process of placing and verifying orders for mobile devices, but still we provided the ABOs with the essential functionality. The ordering process works the same for the ABOs themselves, as well as for other ABOs in their group.

Managing clientsThe mobile app contains a complete list of an Amway Business Owner's clients,the status of registration of new members and, most importantly, the ability to registera new client, which will usually happen at a meeting with the client.

3

Amway's First Steps into e-commerce

Digital Transformation– Ukraineand the 10 Eastern European Countries

Amway is the world leader in direct selling and operates in 80 countries. Amway lets anyone start their own company and sell high quality products and offer others the opportunity to sell too. More than 3 million Independent Business Owners (IBOs) currently work with Amway worldwide.

Amway offered its IBOs in Eastern Europe the opportunity to order and sell products online in 2001– first in Hungary, then Croatia, the Czech Republic, Poland, Romania, Slovakia, Slovenia, and Turkey. The system was a huge success with 126,000 users by the beginning of 2006.

The company decided to build a completely new online system that could handle significantly more Users, offer new functionalities, and allow for flexible functionality changes to keep pace with the ever changing business environment. An important aim of the new project was to deliver a new, clear and attractive tool to facilitate placing orders, aid daily business operations and attract people to Amway.

Ukraine, Russia, Turkey, Poland, Hungary, Croatia, Czech Republic, Romania, Slovakia, Slovenia

In order to better understand the future solution, we prepared a systemprototype. This was then used to conduct sessions with selected Amway IBOsin Warsaw, Prague, and Budapest . The prototype enabled us to collect valuable feedback and the client to prepare for the upcoming changes.

The system was first implemented in Ukraine, which did not have an e-commerce system at the time, so this was a pioneering enterprise for that country.

As a result of the experience gained from our first implementation, we modified our original project assumptions and decided to make reference visits to eachof the countries involved. During those trips, we presented parts of the system specifications, especially those concerning country specific functions, e.g., ordering and payment options, and customer invoicing. Our system engineers workedon the final system specifications onsite.

We managed implementation of the system in two countries every two months and the users responded enthusiastically in every case. Once the system had been implemented, the value of online orders (as a percentage of the total) increased from 30% to 60% and is now approaching 80%. The number of registered users and orders also rose dramatically.

Austria, Belgium, Denmark, Finland, France, Greece, Spain, the Netherlands, Ireland, Germany, Norway, Portugal, Switzerland, Sweden, the United Kingdom and Italy

The success of the Eastern European implementation, as measured by the volume of orders, the percentage of online orders in the total number of orders, and the significant reduction of operating costs convinced the Management Boardof Amway Europe to continue with 16 Western European countries.

Since 2012 we have observed a growing number of visits to Amway Online frommobile devices – smartphones and tablets. Users, especially the Amway Business Owners (ABOs), started to ask about a mobile version of the system that they could access on their smartphones, while at their clients' location. Therefore, we faced the challenge of devising a mobile strategy for Amway Online.

Frequently, mobile projects are understood as mobile applications copying existing functionalities of desktop Internet systems. This understanding could not be more wrong. On the contrary, mobile solutions should take maximum advantage of the capabilities of mobile devices and fit into the overall customer service strategy.Which is why we use the term mobile strategy.

2 apps x 2 versionsThe mobile solution is comprised of two separate applications, one for the iOSand the other for the Android operating system. Each application has two versions: one version for smartphones and one version for tablets. The informationarchitecture changes accordingly based on the device being used, which allowed us and our client to avoid creating separate applications for tablets.

Collecting ordersThe Amway Business Owner can collect an order for his or her client in the formof a shopping list. This list is then synchronized with Amway Online, where the ABO can eventually confirm the order. Order confirmation is made in Amway Online Light, therefore, also via a smartphone or tablet. As you can see, order collection can be done offline, while placing the order requires an Internet connection and, in fact, happens in the Amway Online system. Thanks to this approach we avoided rewriting the complex process of placing and verifying orders for mobile devices, but still we provided the ABOs with the essential functionality. The ordering process works the same for the ABOs themselves, as well as for other ABOs in their group.

Managing clientsThe mobile app contains a complete list of an Amway Business Owner's clients,the status of registration of new members and, most importantly, the ability to registera new client, which will usually happen at a meeting with the client.

Expansion to Western Europe

Mobile Strategy

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Sales presentationsThe Amway Business Owner has access to multimedia materials in the mobile app that they can use to make an attractive presentation on their smartphone or tablet.

SponsoringAn important role of Amway Business Owners is introducing new members to Amway. This process begins with sponsoring – registration of a new ABO bythe Amway Business Owner. The mobile app supports this process by providing the Sponsorship Invitations functionality. At a meeting with a candidate an ABO can send him or her an invitation, which starts the registration process.

NotificationsNotifications take advantage of the specific features of a mobile device. Notifications include importantinformation for ABOs related to their business, such as:

status of placed orders,

new orders placed by clients in Amway Online,

registration of new clients in the Amway Business Owner's profile.

Sales resultsWith their mobile device Amway Business Owners can view the current value of the points they collected, which reflect their monthly and global sales results. In this way they can check how orders placed by other ABOs influence their own salaryand status.

Working offlineThe mobile app enables working offline. This is really important for Amway Business Owners since they don't always have a stable Internet connection when visiting their clients. In the offline mode ABOs can present Amway products, createan order, or prepare an invitation for a new partner. When they get access to theInternet the data between the mobile app and Amway Online is synchronized.

Figure 2:With the mobileapp Amway Business Owners can takeadvantage of the digital business tools whenvisiting their clients.

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The Light Version complements the mobile strategy of the Amway Online system, serving both customers and Independent Business Owners (IBOs).

For customers, the frequency of their Amway product purchases did not justify the development of a native mobile application. The customers weren’t motivated enough to download it. However, the Light Version fully satisfies the needsof the demanding smartphone user.

For Amway Independent Business Owners, the Light Version has offered 100% coverage for all functions of the system, which the Mobile Application was unable to provide for technical and cost reasons. Owing to this, the IBO usinga smartphone has access to all data and can use all operations in the systemin an ergonomic manner.

Mobile First in PracticeWith the Mobile First concept, web-based systems are designed for mobile device users first. Next, solutions created for mobile devices are propagated to the standard version of the system. We have used the Mobile First approach in the Amway Online system design. We identified those processes in the system which needed to be simplified for use with the smartphone. What proved particularly complicated were the registration processes for both Customers and for IBOs. The processes were completely redesigned for smartphones – we divided them into clear steps, concealed fields which were not required, and removed or modified some actions. The result was astonishing – processes that had been difficult to go through even on a desktop proved surprisingly simple on a smartphone. Therefore, we decided to implement them in the standard version of the system.

Mobile UX DesignIn the absence of strict corporate guidelines for mobile services, our UX team could demonstrate all their capabilities, which yielded both an interesting graphical design and unique website ergonomics. Thanks to this, the Light Version delivers a user experience that matches the best mobile applications.

Light Version

Figure 3:UX design of theLight Versionof Amway Onlinefor smartphonesensures mobile appexperience.

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Our cooperation with Amway has been going on for 11 years now. During this time we have introduced Amway Online to 31 countries in 46 unique language versions to serve 1.5 million users. In 2014 we started the Pain Points Removal project to solicit feedback directly from users to improve the functionality of the system.

Amway Business Owners participated in usability tests of their dedicated system which they use on a daily basis. It turned out that certain areas and processes within the system did not aid their job to the extent that could be expected froma business tool. Armed with these findings, we got back to our technological base and gradually modified parts of the system, like the ordering process or the spon-soring module for registering new Amway Business Owners by other ABOs. The design was highly approved by the users, becoming the envy of Amway’s other markets.

Pain Points Removal Project

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"You've got to start with the customer

experience and work back toward the

technology – not the other

way round."

Steve Jobs

Figure 4:Adapting the registration process to digitalexperience increasedthe success rate of online registrations from70% to nearly 90%.

Increase in online registrationsWe have split the uniform, overwhelming Amway Business Owner registration form into step-by-step screens that guide the user through the consecutiveregistration stages. Therefore, we have replaced a form that resembled paper ques-tionnaires with a simple and clear process adjusted to the digital behaviorsof internet users. The registration form itself has been adjusted to facilitate completion on mobile devices. Thanks to these changes the success rate of online registrations among Amway Business Owners has risen from 70% to nearly 90% and remains at this level.

Effective searchWithin our latest implementation we have modified several areas of the system, including the search tool. Powered by a new engine and fitted with autocompletion and live search functionalities, it provides users with the kind of experience they are familiar with from everyday web browsing.

Due to the increased effectiveness of the search mechanism we want to achieve better conversions for orders initiated from within the search tool. Simply put,we want the user entering a phrase into the Amway Online search engine to receive results that match their inquiry in a way that will make them buy.

Streamlined navigationWe have also taken a closer look at the user interface and the database, which was slimmed down to remove excess, heavy PDF files and can now work much more efficiently.

The product catalog also underwent a metamorphosis. As a result, product lists are now clearer and more accessible. The filtering mechanism has been modified too.It is more intuitive for users to navigate the catalog and get more quickly to the content they are looking for.

Delivery costs calculationWe have redesigned the ordering process to reflect delivery costs upfront. Up to now the costs appeared only at the last stage. Therefore the Amway Business Owner did not know how much they would need to pay for the delivery until the very end. We adjusted algorithms that calculate delivery costs to the specificsof 6 countries – Poland, Lithuania, Latvia, Estonia, Turkey and the Czech Republic. As a result users will feel more secure when placing orders. This is of great importance for the whole customer experience.

Building loyaltyAccording to statistics, what is most important for building customers' brandloyalty is delivering high quality products and good customer service. When oneof these is missing, the chances for consumer loyalty fade away. Therefore we are currently working on an individual customer's registration module. A brand also needs to stay in touch with its customers to build loyalty. Today it means delivering additional, useful value. Our next task will be a creative transformation of the content included in the section for Amway Business Owners.

Figure 5:The new searchmechanism in AmwayOnline immediatelyshows products thatmatch an inquiry to drive order placement.

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SituationAt the beginning of September, new regulations on the processing of personal data entered into force in the Russian Federation. According to the new provisions, international companies operating in Russia and Kazakhstan need to save the personal data of Russian and Kazakh citizens on servers located in the RussianFederation. e-point was responsible for ensuring that the client's system complied with this regulation while minimizing the impact to existing hardware and software solutions.

ChallengesTo comply with the personal data regulations, e-point needed to meet the following challenges:

Extracting the account registration and system activity data associated with citizens of the Russian Federation from the centralized database for Centraland Eastern Europe and moving that data to a data center located in Russia.

Acting on a difficult, unpredictable and changeable market.

Completing the task in a short timeframe.

Results:Compliance with the local regulations concerning the processing of personal data.

Launching an additional, dedicated data center.

Designing and obtaining the necessary telecom, network and server infrastruture.Integration with other IT resources from the client's global network.

Entirely remote configuration of all layers of the environment.

Benefits:Not only did this effort keep the client in compliance with personal data handling requirements for users within the Russian Federation, the implementation team gained invaluable experience, contacts, and an operational base within the territoryof the Russian Federation. This sets the foundation for subsequent projectsin the country.

Russian Regulations: EnsuringCompliance through Technical Ingenuity

"The project involved launching a new

instance of the whole ecommerce envi-

ronment on the territory of the Russian

Federation that would be maximally

independent from the infrastructure

maintained in Warsaw."

Norbert Pabiś,Head of Technology

at e-point

9

"We are ready to launch a similar

application environment on a similar

physical environment, totally

remotely."

Norbert Pabiś,Head of Technology

at e-point

Phase 1: organizing the infrastructure on site3 possible ways of approaching the challenges were devised:

A. Purchasing the hardware in Poland and transporting it to a Russian data center to configure remotely

This option was abandoned due to concerns about meticulous border control inspections causing the technological infrastructure to arrive too late.

B. Cloud computing

A Dutch hosting company had both the required infrastructure and the physical servers hosted in the Russian Federation. This option was abandoned because, due to the licensing terms, the cost of utilizing the infrastructure would dramatically rise and erode any profits from the implementation.

C. Purchasing the hardware in the Russian Federation

This is the option that was selected.

Phase 2: software migrationAll the necessary work related to the configuration and installation of the new environment was done remotely. Installation of the necessary components was divided into stages. The first step was to configure the network environment so that it could be used for starting the servers. Software migration was completed using epoint's proprietary solutions supporting remote administration and scripts automating the installation of selected components of the application.The production launch of the ecommerce platform was preceded by a test carried out with the client's help, as well as a final audit of the security and stability of the environment.

"At present clients who access the

ecommerce system from the Russian

and Kazakh domains are served with

a system operating in the Russian

Federation."

Łukasz Łagudza,Senior Solutions

Architect at e-point

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We help innovative companies transform their ideas into cutting-edge digital systems. 

For Amway, our partner of 10-years, we made one of the biggest eCommerce systems

in Europe – 31 countries, 46 unique languages, 1.5M users. Our solution supports taxes, delivery,

or payments on the pan-European level, as well as direct selling features, such as group orders.

We provide all of our clients with 360 degree solutions that establish digital competencies

within key business functions. This means that although we are a software house, the scope

of our activity covers both system engineering and UX design, digitalization activation

and project management.

As a Silver Regional Partner of SAP/hybris we possess a mature and stable technological base

to enable complex B2B2C eCommerce models executing your omnichannel strategies.

EngagementSolutions forDirect Selling

Omnichannelfor Financials

E-commerceon SAP Hybris

11

Marek SodolskiSales & Marketing Vice President,Board Member at e-point+48 571 338 610msodolski@e-point.com

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